Islay Thank you again for your comments, Just wanted to share...

Islay

Thank you again for your comments,

Just wanted to share one brokers comments re AFJ today....in particular their take on Govt response to productivity commission..

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Regulatory risk to the upside: We continue to view the childcare industry favourably
given its underlying drivers of population growth, increasing fees (albeit moderating)
and strong government support. While there is some uncertainty ahead of the
government’s response to the Productivity Commission’s Final Report, we believe
there is risk to the upside given the following (i) the government’s commitment to
supporting and increasing female participation in the workforce; (ii) draft
recommendations from the Productivity Commission were benign-to-positive for
operators, in our view, with the most significant recommendation (calling for a
simplification in the government funding structure) resulting in a 21% increase in
government funding; (iii) the government recently announcing a wind back of its paid
parental leave scheme with savings directed into making childcare more affordable.
AFJ well placed for proposed change to subsidy structure: Should the government
elect to adopt the Productivity Commission’s recommendation to move to a single
means-tested payment, our analysis suggests that AFJ is very well placed to benefit.
AFJ has a portfolio skewed toward regional and outer metropolitan suburbs (85% of
portfolio), which have average household income levels (families with children) that
will see increased levels of funding, under the Productivity Commission main
recommendation. We believe the funding increase to those with annual household
incomes below $160,000 will lead to greater demand in areas where the majority of
AFJ centres are located and therefore higher occupancy.

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